Service Charge Budget Report

Service Charge Year

25 December 2014 to 24 December 2015

for 39-49 Oulton Rise

Northampton NN3 1EW

Prepared by Johnson Fellows LLP Charter House

163 Newhall Street Birmingham

B3 1SW

on behalf of the Landlord Hawksvalley Properties Ltd

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Contents Page Introduction 3 The Property 3 Service Charge Objective 3 Residential service Charge 3 VAT 3 Voids and concessions 4 Banking 4 Management Team 5 Service Charge Budget and Approval 6 Service Charge Apportionment 7 Budget Commentary 8 Appendices A. Budget Comparison Report 9 B. Apportionment Schedule 10 C. Service Charges (Summary of Tenants Rights and Obligations) 11

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Introduction This report has been prepared by Johnson Fellows on behalf of the landlord Hawksvalley Properties Limited. It is intended to provide details of the planned expenditure for the forthcoming service charge year, 25 December 2014 to 24 December 2015. The Property The property is located at the junction of Spinney Hill Road and Oulton Rise on the housing estate known as ‘Parklands’, situated to the north east of the town centre, off the Kettering Road (A5123). The premises consist of a parade of ground floor retail units, with residential flats above and associated garages. There is a customer car park to the front of the property and a private service road providing vehicular access to the rear. A communal staircase leads to a walkway terrace, which provides access to the residential flats. Service Charge Objective The objective of this budget report is to provide a clear explanation for the recovery of service charge expenditure on a not for profit/not for loss basis. It is also to promote clarity and transparency and to allow the tenants to budget accurately for the forthcoming year. The objective of Johnson Fellows as Managing Agents is to provide a high quality management service; we aim to provide a well maintained environment delivering value for money for the service charge expenditure. The service charge is administered having regard to RICS Practice Standards; Service Charges in Commercial Property: 3rd Edition, Code of Practice and the Service Charge Residential Management Code: RICS Code of Practice. Residential Service Charge Rights and Obligations In accordance with the Landlord & Tenant Act 1987, Section 48 we can confirm that the Landlord is Hawksvalley Properties Ltd and their address for the service of notices is 6 South Bar, Banbury, Oxfordshire OX16 9AA. For the residential long leaseholders we have enclosed herewith a copy of ‘The Service Charge (Summary of Rights and Obligations, and Transitional Provision) (England) Regulations 2007’, as per Appendix C. VAT The Landlord has elected the property for VAT. The VAT on the service charge expenditure attributable to the residential part of the property cannot be recovered by the landlord, so the gross expenditure is applied to the residential long leaseholders. The VAT on the commercial expenditure can be recovered, consequently the net costs plus VAT are applied, enabling the commercial leaseholders to recover the VAT charged to them.

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Voids and Concessions Presently there is one void unit at the property known as 41. The landlord is responsible for the service charge contribution for void units. The landlord is responsible for any service charge shortfall resulting from concessions granted to tenants. Banking Due to the general level of service charge funds, we do not maintain the funds in a discreet bank account. As a consequence the service charge is not credited with any interest, neither are any bank charges allocated to the service charge accounts. The funds are held within the Johnson Fellows Clients Account, which is maintained with Barclays Bank plc, Kidderminster branch.

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Management Team Chris Monteith Facilities Manager Johnson Fellows, Charter House, 163 Newhall Street, Birmingham, B3 1SW Direct Dial: 0121 234 0409 Mobile: 07786 072 755 Email: chris.monteith@johnsonfellows.co.uk Chris Monteith is responsible for the repair and maintenance of the property and statutory compliance. Ian Starbuck Partner Johnson Fellows, Charter House, 163 Newhall Street, Birmingham, B3 1SW Direct Dial: 0121 234 0462 Mobile: 07887 745 635 Email: ian.starbuck@johnsonfellows.co.uk Ian Starbuck is the management surveyor for the property Rachel Scicluna Partnership Secretary Johnson Fellows, Charter House, 163 Newhall Street, Birmingham, B3 1SW Direct Dial: 0121 234 0417 Email: rachel.scicluna@johnsonfellows.co.uk Rachel Scicluna is the client accountant responsible for this property.

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Service Charge Budget and Approval The proposed service charge for the year 25 December 2014 to 24 December 2015 provides a total residential budget of £3,127.68 and a total commercial budget of £3,909.60. A summary of the service charge budget is attached at Appendix A.

…………………………………………………… Management Surveyor 08/01/2015 ………………………………………………….. Dated

………………………………………………….. Partner 08/01/2015 …………………………………………………. Dated

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Service Charge Apportionment The property is shared between residential and commercial leaseholders therefore the service charge has been apportioned over three schedules. The service charge costs are apportioned in line with the terms of the lease and provide for each tenant to pay a due proportion of the service charge which is attributable to each tenant’s premises. This is shown in Appendix B. The rationale behind our splitting the shared costs for the residential and commercial leaseholders is purely due to VAT. Residential properties are not able to recover VAT, therefore the expenditure detailed is inclusive of VAT (Gross). The commercial leaseholders are able to recover VAT, therefore the expenditure for the commercial element is as net of VAT. Schedule 1 Residential – 100% (Gross) Schedule 2 Residential – split 40% with Commercial tenants (Gross) Schedule 3 Commercial – split 60% with Residential tenant (NET) For expenditure that relates purely to the residential areas we have applied 100% to Schedule 1. For expenditure that relates to the external parts, common areas and the fabric of the building the costs have been split 40:60 between Schedules 2 & 3.

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Budget Commentary Schedule 1 – Residential – 100% GROSS This schedule details the budget headings that benefit the residential flats only. All figures on this schedule are inclusive of VAT. There is no expenditure for this heading.

Schedules 2 & 3 – Residential - 40% Gross / Commercial 60% Net This schedule details the budget headings that benefit both the residential flats and the commercial units. The costs are split 40:60 between the residential and commercial tenants.

Schedule 2 Schedule 3

1. Building Repairs £1,488.00 £1,860.00

We have budgeted for Adhoc repairs to the common area including re-levelling of paving slabs, gutter repair and clean, pot holes and a contingency fund for any unforeseen adhoc works

2. Landscaping £864.00 £1,080.00 This figure represents the cost for a monthly litter pick and weeding of the common area.

3. Electricity Supply £72.00 £90.00

This is the cost for the supply for the communal lighting and car park.

4. Management Fee £583.68 £729.60

This figure represents the cost incurred to prepare and manage the service charge budget together with arranging necessary maintenance/repairs and carrying out periodic inspections

of the property. There is an increase of 1.3% to fall in line with the RPI.

5. Professional Fees £120.00 £150.00

This is the fee for having the year end accounts independently certified. Total: £3,127.68 £3,909.60

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Appendix A

Budget Comparison Report

Schedule 1 - 100% Residential (Inc. Vat)

Item Budget 2013/2014 Budget 14/15 Comparison

£

Building Repair -£ -£ -£ 100.0 %

Total £ - £ - £ - 100.0 %

Schedule 2 - 40% Residential (Inc. Vat)

Item Budget 13/14 Budget 14/15 Comparison

£

Building Repairs 1,470.00£ 1,488.00£ 18.00£ 1.2 %

Landscaping 864.00£ 864.00£ - 0.0 %

Electricity Supply 72.00£ 72.00£ - 0.0 %

Management Fee 576.00£ 583.68£ 7.68£ 1.3 %

Professional Fees 120.00£ 120.00£ -£ 0.0 %

Total £ 3,102.00 £ 3,127.68 £ 25.68 0.8 %

Schedule 3 - 60% Commercial (Exc. Vat)

Item Budget 13/14 Budget 14/15 Comparison

£

Building Repairs 1,838.00£ 1,860.00£ 22.00£ 1.2 %

Landscaping 1,080.00£ 1,080.00£ -£ 0.0 %

Electricity Supply 90.00£ 90.00£ -£ 0.0 %

Management Fee 720.00£ 729.60£ 9.60£ 1.3 %

Professional Fees 150.00£ 150.00£ -£ 100.0 %

£ 3,878.00 £ 3,909.60 £ 31.60 0.8 %

Comparison %

Comparison %

Comparison %

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Appendix B

Apportionment Schedule

25 December 2014 - 24 December 2015

Unit Tenant Schedule 1 Schedule 2 Schedule 3

39 Victor Locke & Maria Nicholau 0.00% 0.00% 13.00%

41 Void 0.00% 0.00% 13.00%

43 Mr & Mrs Patel 0.00% 0.00% 13.00%

45-49 Co-Operative Food Group Ltd 0.00% 0.00% 61.00%

Flat 1 Stephen Walter & Caroline Denton 25.00% 25.00% 0.00%

Flat 2 Justine Coles 25.00% 25.00% 0.00%

Flat 3 Brian Alen 25.00% 25.00% 0.00%

Flat 4 Martin & Susan Shelley 25.00% 25.00% 0.00%

Total 100% 100% 100.00%

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Appendix C

Summary of Rights and Obligations and Transitional Provision

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